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22 august 2012 Volume 11

Issue 17

www.outlookmoney.com l 22 august 2012 l outlooK moNeY 1

Contents

Head Office AB-10, S.J. Enclave, New Delhi 110 029; Tel: (011) 33505500, Fax: (011) 26191420 OtHer Offices Bangalore: (080) 33236100, Fax: (080) 25582810; Kolkata: (033) 33545400, Fax: (033) 22823593; Chennai: (044) 33506300, Fax: 28582250; Hyde rabad: (040) 23371144, Fax: (040) 23375676; Mumbai: (022) 33545000, Fax: (022) 33545100. Printed and published by Vinayak Aggarwal on behalf of Outlook Publishing (India) Pvt. Ltd. Editor: Udayan Ray. Printed at IPP Limited, C4-C 11, Phase-II, Noida and published from AB-10 Safdarjung Enclave, New Delhi 110029For Subscription queries, please call: 011-33505653, or email: yourhelpline@outlookmoney.com

Published for the fortnight of Aug 9 - Aug 22, 2012; Release date: Aug 8, 2012. Total no. of pages 72 + Covers

Outlook Money does not accept responsibility for any investment decision taken by readers on the basis of information provided herein. The objective is to keep readers better informed and help them decide for themselves.

Cover Design: MaNOJit datta; Cover Photo: dreaMstiMe NEXT ISSUE

DateD 5 sep 2012 ON StaNDS

22 aug2012

46 REal ESTaTE The economics of scale don’t seem to hold true, at least in realty projects involving devel-opers and builders. No matter how large the number of apart-ments built in a given project, the cost of units is always high; the reason being the huge 40-50 per cent profit margin of the builders. A good way to cut out this unnecessary cost is to form a co-operative group housing society among friends and construct a house on the purchased plot of land

ANIRBAN BORA

15 hard Nuts cracKedsituations often arise when one fears to set off towards one’s cher-ished goals simply because they think it is unreachable or because they harbour other apprehen-sions. these could also relate to matters as important as starting one’s own enterprise, in effect put-ting his or her survival at stake, to other mundane tasks such as con-structing a house, consolidating a mutual fund folio, or even reading a company’s balance sheet. Here’s a guide on how to approach the tricky situations and save on the finances involved

coVer storY

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2 outlooK moNeY l 22 august 2012 l www.outlookmoney.com

4 Internet Contents Action in our Web world6 Editor’s Note8 Letters69 Fortnight Figures72 sunny’s Money Blackout for real

UpdaTE9 Newsroll RBI keeps key rates unchanged in monetary policy review; High NPAs a serious concern for public banks; Last date for tax filing extended up to 31

August; OLM picks show spirited performance in Q1; Litigations take toll on Deccan Chronicle stocks 16 Queries Your queries on matters affecting your personal finance answered

REgUlaRS

STaRT28 ONlINE INSURaNcEWhat to watch out for while buying a term life insurance policy online

30 INSURaNcE dEcOdERING Life Prospering Life

31 INSURaNcE madE EaSyIt’s important to buy the right life insurance policy at the right time

32 pROpERTy INcOmE TaX How to calculate income from house property and the tax breaks available

34 INTERvIEw Federal Bank chief Shyam Srinivasan on recent RBI moves and other issues

36 phaRma STOckS TONIc Even in this flat market, some pharma stocks are doing well. Here are a few

38 STOck pIck Why pharma major Lupin is worth a

buy despite its high valuation

40 avaNT gaRdE Indian government seems to have giv-en up on concerted efforts and become totally dependent on gods to solve their problems, writes Mohit Satyanand

42 Olm 50 Fund performances last fortnight plus a review of Reliance Tax Saver Fund

50 hEad STaRT It’s important to have smart strategies for debt, savings and investments

52 lIfE gOalS How and why to invest in gold (ETFs, physical and e-gold) for your children’s future needs

maNagE54 famIly TRaNSITIONSPersonal finance challenges that new entrepreneur Asif Upadhye faced and the lessons for others

Contents56 cOmmOdITIES Gold has had a great bull run in the last few years. Will the rally continue? Or is it time you book your profits?

57 fUTURES & OpTIONSCurrency futures can help prevent losses due to the rupee’s depreciation.

60 alERT INvESTORIRDA’s website for educating customers on insurance matters

61 dIy mONEy e-Buying mutual funds from fund houses is not that difficult. Here’s how

SENIOR mONEy62 REmITTaNcES, REfUNdS How to manage remittances as well as get most out of income tax refunds

SpENd 64 pERSONal TEch NewWays to trim data usage cost on your smartphone without cutting down on actual usage or experience

66 hEalTh NewThe financial pitfalls to avoid while choosing a health screening package

67 fOR whaT IT’S wORThIt’s important to know why we are spending our money the way we are, writes Sumana Mukherjee

68 yOUR SpacE New Readers’ own space to comment, share thoughts and win prizes

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ANIRBAN BORA

VARUN VASHISHTHA

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Manu Sood: I applied for a loan with LIC Housing Finance. The loan has been sanctioned, but the agent is demanding money from me. He is not giving me any written proof for the accountability of that money. Should I give him the money or fight against it?

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Gold Rush MFs have lined up a spate of gold funds for your palette. Are they any good? Trying Times The stockmarket is going through a short shift and an interest rate cut by the RBI could help, marginally. Amid this, the Maruti logjam goes onNCD Review Seeking fixed returns? Here’s one from Shriram Transport Finance with a decent payout On A Watch Sebi puts brakes on derivatives trading in some stocks IPO Norms Sebi panel moots outlining risk factor in IPO document for general insurers Q1 Results FMCGs put up good show; mute show from banks, NBFCs, mixed bag for Indian IT sector

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Design and Illustration: anirban bora

27 July 2012

Trying Times ahead for The economy?

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goldPlus

s NCD Review: ShRiRam TRaNSpoRT fiNaNCe sYouR DeRivaTive

liST STaNDS pRuNeDs KNow moRe abouT

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Newsbits Q1 ReSulTS: hul, DabuR,

ColgaTe- palmolive, iNDiaN baNK, CaNaRa baNK,

liC houSiNg, hCl TeChNologieS, wipRo sloaN pRiCiNg geTS

flaK fRom Rbis Capex liKelY To fall

ThiS YeaR: CRiSil

Mutual Funds

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4 OUTLOOK MONEY l 22 AuGuST 2012 l www.outlookmoney.com

As we were going to press, the nation has made international headlines for the wrong reasons: by earning the dubious distinction of being the country that saw the world’s biggest ever power outage, which threw the whole coun-try and its economy into chaos twice in the space of two days. Are we becom-ing an “aspiring superpower without power”? Luckily, not all the power we need in our lives needs to come from a power station. Nor do we need govern-ment’s help, or, for that matter, anybody’s help to do most things in our lives. There is a lot we can do all by ourselves. Ironically, most of us aren’t aware what we can achieve without any help from the government, advisors and the like, more so in personal finance matters. So, it is only appropriate that on the occasion of our Independence Day we bring to you this special package which tells people how to do without much fuss 15 things that they think they can’t. We cover a range of topics, from starting a venture without any capital, read-ing balance sheet essentials, buying a second hand car, making a house on a plot of land (yes, that’s right, in this day and in this age), getting the money that a loved one saved for you but is now stuck in legal morass in the absence of a Will. This is yet another effort by us to empower you to help yourself and we hope that you would agree that our timing is right.

Sticking on to the topic of self-empowerment, we have yet another offering for our readers, especially our women readers. You would find on stands the first of our collector’s issues that we will be producing during the course of our 15th year. Entitled “Ms in Charge”, the special edition tells women readers all they need to know to manage their personal finances. Women, in the course of their lives, typically go through situations unique to them—relocation after marriage, career disruption due to childbirth, re-entry into the corporate rat race, complete career switch to achieve work-life balance. Along the way, there could be mishaps, such as loss of spouse or divorce. When you view these real-ities along with emerging realities such as record number of women joining the workforce and their life expectancy increasing rapidly, with them outliving men by about an average of five years, you know how important it is to have a personal finance guide dedicated to women. Our Women’s Special tries to be that ready-to-access resource that women always wanted, but didn’t have. To produce this issue, Outlook Money’s writers met scores of experts and regular people across the country to get their perspectives even as my photographer colleagues captured the images that chronicle the life of the contemporary urban Indian woman. Do tell us if we have succeeded in our objective of empowering you and helping you to take charge of your life. r

Taking Charge

6 OUTLOOK MONEY l 22 august 2012 l www.outlookmoney.com

(Udayan Ray)editor@outlookmoney.com

http://twitter.com/udayanray

www.udayanray.blogspot.in

Yes, we canMost of us aren’t aware what we

can achieve by ourselves

Ms in charge Our guide for all women for all things

financial is now on sale

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22 AUGUST 2012

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JULY 2012

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Brought to you by

Divya Sharma, a qualifi ed pilot, has made her fi nances fl y by taking control of all aspects, from buying a home to securing son Utsuk’s future

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Editor’s Note